Christmas can be a nervous time for wholesalers as they wait to see which drinks brands are going to have their prices cut to ribbons by the major multiples, but the brewers are trying hard to help wholesalers, and their customers, by offering exclusive packs and deals.
John Heynen, director of sales impulse at Coors, explains: “The wholesale channel is fundamental to our business. For us at Coors, a thriving wholesale and independent sector is a necessity not a preference. This is reflected in a number of areas within our Features > Business, not least our SKU plans. We have introduced a number of packs exclusively for the sector in the last 18 months.
“A further reason for our focus is that beer is an extremely important category for the independent sector. In several grocery categories, the top four multiples account for between 70% and 80% of overall volume sales. By contrast, only around 45% of total off trade beer sales are made through the top four multiples.”
To allow convenience and independent stores to differentiate themselves from the offers in the multiple grocers, Coors has produced a range of price-marked packs, exclusive to the impulse sector on brands such as Carling, Grolsch, Coors Fine Light Beer and Caffreys.
In the run-up to Christmas, Coors will be putting heavyweight backing behind Grolsch, extending its Green Light District campaign from the on-trade, into the off-trade. From the start of November, it will be running a ‘text to win’ mechanic on all Grolsch packaging, giving consumers the chance to win a weekend break, every day for three months
Heynen adds: “Carling C2 was launched into the off-trade in September and is a huge priority for us in the lead-up to Christmas. Not only have we invested more than pound;2.5m in research, trials and product development in Carling C2 – our mid-strength lager – but we have also committed to a pound;2m support launch of a 500ml can, 4-pack format.
“We firmly believe Carling C2 will generate real category growth for retailers and pioneer the mid-strength category. We are so confident that consumers will love the taste of C2 that we are launching with a money back guarantee on the pack.”
A trend that has developed over the past year is for consumers to look for lighter drinks. Des Ewing, director of customer relationships – take home wholesale at InBev UK, says: “There has been a definite consumer shift to lighter drinks in 2006. This is evident from the growth of Magners in the cider category and recent additions to our portfolio, Brahma and Beck’s Vier, which nbsp;are performing extremely well.
“Lager is doing relatively well, although the value of sales was down 1.4%, with ale declining by around 6% which maintains a long-term trend. The value of beer sales in the impulse market has declined by around 2% in the year to date compared with the take home market as a whole which is up 3% during the same period.”
Ewing agrees with Heynen that independents can still do well at Christmas: “Christmas is absolutely crucial for independent retailers because it accounts for around 30% of their annual beer volume. Despite the growth of multiple retailers, a significant amount nbsp;of our volume is sold through the small store channel including independent and convenience outlets largely because of the impulse nature of beer and alcohol in general.”
He adds: “My advice to wholesalers for Christmas is to put their faith in big brands because it is the time when there is increased demand for them because so many occasional consumers come into the market and they go for the high-profile brands they know and trust.”
Like Coors, InBev has been supporting the independent sector with price-marked packs. Ewing says: “We have had great success during 2006 with PMPs of Stella Artois, Beck’s, Castlemaine XXXX and Tennent’s Lager. Despite a duty increase we have managed to hold the price points on these packs, all of which make good margin for the independent retailer and the wholesaler. We will be continuing our focus on these packs at Christmas which is a massive opportunity as consumers trade up to mid-size packs like the eight-pack.”
Scottish Newcastle also picked up on the trend for lighter beer with the launch of Foster’s Twist. Craig Clarkson, head of customer marketing, S N UK (off-trade), says: “Consumers are increasingly looking for beers that are lighter and easier to drink but can still deliver on taste and refreshment.
“Foster’s Twist got off to a flying start this summer and we are confident our heavyweight national TV campaign will create high levels of awareness and trial for ‘the laid back lager’.”
S N has also been investing heavily in the ale sector with its backing for John Smith’s Extra Smooth. Clarkson comments: “Demand for ale goes up in winter and we are advising retailers that they need to ensure they give enough space to leading ale brands. The recent success of our World Cup activity showed that by focusing on key brands, retailers can drive growth in their ale categories.
“Ale is still a profitable category and S N has continued to lead the category and drive investment. Mid-to-big pack sizes were popular last Christmas time, so experience tells us to expect more of the same.”
Carlsberg UK is marking the approach of Christmas with the launch of a new Christmas beer. Ged Lowry, take home controller for Carlsberg UK, says; “We are delighted to be able to bring one of Denmark’s favourite beers to the UK. Christmas beer is a major part of the Christmas experience in Denmark with retailers and consumers eagerly waiting for its annual launch. We are confident that this limited edition festive treat will sell out very quickly in the UK, so we are encouraging retailers to get their orders in fast.”
Carlsberg UK is predicting strong Christmas 2006 take home sales, boosted not only by the introduction of new products such as Carlsberg Christmas beer, but also due to both Christmas Eve and New Year’s Eve falling on Sundays. This gives the trade four bonus key sales opportunities (Friday 22nd, Saturday 23rd, Friday 29th and Saturday 30th) as people extend the holiday celebrations over the long weekends. As a result, Carlsberg UK expects an additional 25.6 million pints of beer to be sold in the take home sector for the 12 weeks up to Christmas 2006. With this in mind, Carlsberg UK is advising retailers to stock up well in advance of the busy season ahead.
Lowry continues: “Our experience shows that beer sales start increasing as early as five weeks before Christmas as the festive season gets under way, so we suggest that take home customers order their seasonal stock 10 weeks before Christmas.”
Anheuser-Busch is another brewer that is offering cash and carry customers price-marked packs over the Christmas period. They include: Budweiser 6x330ml NRB at RRP pound;5.50; Budweiser 4x500ml can pack at RRP pound;3.99; and Bud Silver 4x440ml can pack at RRP pound;3.
Jim Gorczyca, marketing director, UK, Anheuser-Busch Europe, comments: “Anheuser-Busch has witnessed a record-breaking year and is expecting further growth this Christmas given the current market trends. The brand continues to hold its place as the UK and Scotland’s best selling premium packaged lager in the on-trade with a 33% share and also experienced an increase in sales in independent retailers last Christmas (up 10% by value on 2004) which is expected again this year.”
Heineken will continue to conduct activity around its sponsorship of the UEFA Champions League, with on-pack promotions, as well as visibility around the Heineken Cup and activity celebrating the Rugby World Cup, of which Heineken is also a sponsor.
Chris Duffy, head of customer marketing, Heineken UK, says: “Other brands in the Heineken UK portfolio will also continue with activity in the channel. Following its wholesale launch in November 2006, Amstel will support wholesalers with visibility, gift with purchase, sampling and depot initiatives. Birra Moretti will also be offering wholesale promotions and visibility materials in the coming year to help drive distribution of the brand.”
Global Brands is looking for a Christmas boost from two new imported beers added to its portfolio. It took over distribution of Tsingtao, China’s number one beer, in September, and its latest addition is Salitos Imported. John Hartley, beer brands director at Global Brands, comments: “Consumers are more adventurous than they used to be and are eager to widen their repertoire and experiment. Genuinely imported beers are in growth above that of premium beers, the lager sector, and the beer sector as a whole, as more and more consumers are prepared to pay a premium price when armed with the knowledge of a beer’s heritage.”
Although once considered primarily a summer drink, the explosion in the popularity of cider suggests there should be healthy sales this Christmas – if wholesalers and retailers can source the products.
Although several cider companies have invested heavily and seen good sales uplifts, Magners appears to have won the most new drinkers. However, it has admitted that demand has outstripped its capability to supply, and as one cash and carry depot manager commented: “I have no problem selling it. Whatever I can get sells almost immediately, but it is obtaining it that is the problem.”
The overall cider market grew by 16% in value terms to August 2006 and was up 9% in volume. John Mills, managing director of Gaymer Cider Company, comments: “Cider has been ‘discovered’ by a new generation of consumers who are attracted by the range of new products available and the advertising and consumer communications that major producers like Gaymer Cider Company are investing in.”
Gaymer has invested pound;24m to support its brands and launch new products. Gaymers Original was the biggest launch, with pound;3m backing, but Addlestones, a cloudy cider popular in the on trade, was introduced in the off trade, and the Orchard Reserve range was also launched during the summer.
Mills points out that wholesale is still the biggest channel for cider distribution, with over 50% of the market, and says his company will be providing strong support in the run-up to Christmas.
“Between October and mid December, Gaymer Cider Company is running a sales drive involving 3,000 independent retailers. Representatives will purchase Gaymers Original cider from wholesale outlets and visit independent retailers in the area to offer them a promotion on the product.
“It helps us grow distribution and builds brand awareness and also gives the retailer the chance of a promotional deal as well as buying up extra stock from the depots. The pre-Christmas period is a good opportunity for a sales drive of this type as people are looking for a high value, bottled cider like Gaymers Original at this time of year.”
Scottish Newcastle will also be carrying out a distribution drive for its relaunched Bulmers Original brand before Christmas, with a fleet of vans visiting independent retailers to introduce them to the Bulmers Original pint bottle.
Jonathan Simpson, national account manager, field sales, who is co-ordinating the Bulmers Original distribution drive, says: “This project is part of our strategy to re-launch Bulmers Original to the market. We wanted to target independent retailers to create excitement around the brand and make them aware that it is now available to them through most cash and carries and wholesalers.”
Merrydown managing director Chris Carr comments: “It’s the premium ciders which are driving market growth, rather than the cheaper ciders. There’s evidence people are looking to premium products with natural ingredients. We are also delighted to report more and more women are enjoying cider.”
He adds: “Naturally I am thrilled to see Merrydown performing so well, but I am also pleased to see other premium ciders thriving. Customers are finally starting to recognise and appreciate the wonderful range and quality of the many premium, mainstream brands available. People are proud to drink cider again.”
Pernod Ricard UK customer development director Lee James says: “Consumers do trade up to wines at Christmas. It’s key to offer premium wines and sparkling wines off shelf this Christmas.” The light wine category grew by pound;37m last Christmas (+4% value and +3% volume) with 50% of the category growth coming from Ros eacute;.James advises: “Think pink again this year. Jacob’s Creek Ros eacute; is the UK’s number one Australian Ros eacute;, Montana is the UK’s number one New Zealand Ros eacute; and the UK’s number one Spanish wine brand Campo Viejo now has a Ros eacute; in its range.”
He also points out that sparkling wine has the greatest reliance on Christmas for category sales, with 41% coming in the 12 weeks to Christmas, and says Jacob’s Creek was the number one sparkling wine brand by value and has a Brut and Ros eacute; offering.
Constellation wines is looking to attract new consumers to the wine category. It has added a lower-alcohol and sweeter-tasting wine to its Banrock Station portfolio to attract drinkers who are reluctant to move into the category. The Australian brand is adding a 9% ABV Crimson Cabernet Sauvignon to its range.
Constellation’s vice president of brands marketing, Clare Griffiths, said: “We found a number of drinkers out there who wanted to come into the category but they were put off by high alcohol. We saw an opportunity for a lower-alcohol wine combined with a slightly sweeter style.”
Ian Thomas, convenience business unit manager for E J Gallo Winery, says: “Branded wines are a safe choice for Christmas as they offer the consumer consistency and value for money.”
He also says Christmas is a valuable opportunity to encourage consumers to trade up, when they are looking for wines for a special occasion or as a gift. For example, from the Gallo Family Vineyards Sierra Valley range to Gallo Family Vineyards Turning Leaf or Coastal Vineyards.
He adds: “We have a thirty-strong sales force focused solely on building business plans with the delivered wholesale, cash and carry and independent retail trade. Our working relationships with the sector are longstanding and we remain firmly committed to our investment in it. We have demonstrated that commitment by regularly launching new products in this sector before any other – for example, our Sierra Valley red and white wines and our Australian range, JJ McWilliam.”
Fair Trade wine is still a relative newcomer, but Ehrmanns has been at the forefront of development, working with the Stellar Winery in South Africa and Vinos los Robles in Chile.
Booker became the first cash and carry to list an exclusive range of Fair Trade wines, when in August it took Stellar’s merlot and chenin blanc varieties.
Earlier this year Ehrmanns also launched BlueRidge wines from the Bulgarian winer, Boyar Estates into the cash and carry sector. They are BlueRidge merlot, cabernet sauvignon and chardonnay, and BlueRidge XR, a barrel aged chardonnay, and merlot.